Sellers must tell buyers of property's problems

REAL ESTATE MAILBAG

January 30, 1994|By MICHAEL GISRIEL

Q: My husband and I own a single-family house in northern Baltimore County. We are getting ready to sell our house and have been told that there is a new seller disclosure requirement in Maryland. What's the story?

A: The legislature recently passed a law that requires the seller to give the buyer information about the condition of the property. If you don't do this, the sales contract could be canceled.

The seller disclosure law applies to all sales contracts entered into after Jan. 1. New-home sales and foreclosure sales are exempt.

The seller of an existing house must disclose any information that he or she knows about the water and insulation; defects in the structure, roof, foundation, plumbing, heating electric and air conditioning systems; land use matters and other material defects.

The seller may provide a "disclaimer statement" indicating that no warranties are being made and that the house is being sold "as is." But given a choice, many buyers would rather have a disclosure than a disclaimer.

Your real estate agent can provide the state Real Estate Commission-approved disclosure and disclaimer forms.

Each buyer must sign and receive the disclosure or disclaimer statement before entering into the real estate contract.

If the disclosure statement is delivered within three days after the contract is signed, the buyer has five days to review the statement and, if he or she chooses, rescind the contract.

If the statement is delivered to the buyer later than three days after entering into the contract, or if it is not delivered at all, then the contract is void unless it proceeds to a completed settlement.

A seller may hire a professional inspector to help complete the disclosure statement if he wants. A buyer may not waive the right to receive the disclosure or disclaimer statement. Any attempted waiver by the buyer is automatically void.

Unless otherwise exempt, the seller must comply with the new law. But a lender can have a buyer sign a form at mortgage application that would end a buyer's right to rescind the contract. Ask your real estate agent or mortgage banker/broker for details.

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